March Madness


March is always a busy travel month for me. Despite having just returned from Washington, DC, I am presently on my way to San Diego. The ICPA conference, which starts this evening, also explains why half of the customs lawyers who practice in Chicago are on this flight. If anything bad happens to this plane, there will be a lot of openings for customs lawyers in Chicago.

This flight also gives me a long overdue opportunity to post about a few relevant cases. The first of which is Moen Inc. v. United States, which addresses the seemingly mundane question of the legal and existential nature of the humble toilet paper holder.

As we shall see, this decision is a clean sweep for the plaintiff who should be congratulated for effectively wiping up a victory. I am certain counsel for the plaintiff is flush with pride. The Government, which found no relief, may feel some urgency to an appeal.

Moen believes the TP holders are properly classified as base metal mountings of Heading 8302. Customs and Border Protection believes the correct classification to be as other articles of zinc including toilet and sanitary wares in Chapter 79. One item is composed primarily of steel and was classified as such by Customs in Chapter 73.

The Court of International Trade started its analysis by determining the scope of Heading 8302. That heading covers:

Base metal mountings, fittings and similar articles suitable for furniture, doors, staircases, windows, blinds, coachwork, saddlery, trunks, chests, caskets or the like; base metal hat-racks, hat-pegs, brackets and similar fixtures; castors with mountings of base metal; automatic door closers of base metal; and base metal parts thereof:

First, zinc is a base metal as defined by Section XV, Note 3.

The next question the Court considered is the meaning of the phrase “base metal hat-racks, hat-pegs, brackets and similar fixtures . . . .” Because the merchandise at issue is neither a hat-rack, nor a hat-peg, the question seems to have been whether it is “similar” to those items. Or, the merchandise might actually be “brackets.” Defining these terms, the Court found that hat-racks, hat-pegs, and brackets have similar characteristic in that they are affixed to a wall or similar structure and used to hang, hold, or support some other item, which, frankly, sounds a lot like a toilet paper holder.

The Government’s counterargument was based on two propositions. First, that the toilet paper holders differ from hat-racks and pegs in that they include a mechanism to secure the roll that is not found in racks and pegs. The first problem with that argument appears to have been that it was not true for all of the models at issue. Still, if the distinction were meaningful, it might have lead to a different result for some of the items. The Court did not find it meaningful.

The second argument is that hats, coats, towels and similar items are removed from their respective racks as an entirety rather than in segments as is the case with toilet paper. First, had this been my case, I would have asked the Judge to take judicial notice of the fact that the ability to take a reasonable portion of toilet tissue for the job at hand is not universal and is almost entirely absent from humans under the age of 10. But, I digress. More important, the Court finds this distinction lacking in the text and also countered by the example of paper towels which are both towels and doled out in segments.

I do have a slight question about how this part of the analysis was framed. The Court was trying to find the defining common characteristics of racks, pegs, and brackets. That exercise, under the principle ejusdem generis, is not textual. I am not balking at the result here. I just wonder whether the right approach might have been for the plaintiff to point to racks that have a similar function. I am thinking, for example, of the racks that hold rope, wire, and chain in hardware stores and are used to dole out portions for sale. I have no idea where those would be classified, but they same similar in function. Textiles and ribbons are displayed in a similar manner.
Turning to the Government’s proposed classification, the Court noted that Note 2 to Section XV excludes articles of Chapters 82 and 83 from Chapters 72 to 76 and 78 to 81. Given that the Court had just concluded that these products are properly classified in Heading 8302, it follows that they cannot be classified in Chapter 79 as articles of zinc or in Chapter 73 as articles of steel.

Ipso facto, the Government’s argument goes down the drain.

Comments

Post a Comment

Popular posts from this blog

CAFC Decision in Double Invoicing Case

The Federal Circuit has issued a decision on the merits in United States v. Inn Foods, Inc.  There had been a previous decision on jurisdiction, which was followed by a trial at the Court of International Trade and then this appeal on the substance. The initial issue is whether Inn Foods' invoicing practice amounts to fraud.  Inn Foods had been receiving an invoice from growers in Mexico that had a relatively low sales prices on it.  Subsequent to entry, Inn Foods created a second invoice at something more similar to market value, retaining the original invoice number, and paid at that higher amount.   Superficially, this looks like a standard-issue double-invoicing scheme.  But, in the age of reconciliation, is it really more like a provisional pricing mechanism?  It might have been possible to make that argument had Inn Foods adjusted its entries accordingly.  It didn't and the loss of revenue was approximately $624,000.  Based on testimony and evidence indicating both knowl
Read more

Ninestar and UFLPA Exhaustion

Image
Exhaustion is a key doctrine in administrative law. When applicable, it requires that a party unhappy with an agency’s determination complete the administrative appeal process before turning to the courts for judicial review. Requiring exhaustion typically promotes judicial efficiency by ensuring that disputes are resolved at the agency and, if they are not, that there is a complete record of the agency process. Exhaustion also ensures that the judiciary respects the executive agencies and their expertise.  There are, on the other hand, times when the courts will find that exhaustion is not necessary or appropriate. Such is the case in  Ninestar Corporation et al. v. United States  et al., a decision of the U.S. Court of International Trade.  Ninestar is also interesting because it is one of the first cases in the CIT involving the Uyghur Forced Labor Prevention Act, known as UFLPA. In my hiatus from active blogging, I missed the rise of UFLPA as a major compliance topic. So, let's
Read more

Precious Tritium

Image
One thing I have learned as a customs lawyer who does a lot of classification work is that there are millions of odd items moving in international trade the existence of which I am completely ignorant. Such is the case of the gaseous tritium light sources used in, among other things, firearm sights. These things use tritium sealed in a glass that has been coated in phosphor. The radioactive tritium decays, releasing beta particles, which interact with the phosphor causing it to emit light. In other words, it creates light with no external power source. Pretty cool.  Tritium is, of course, a real thing. It is an isotope of hydrogen. We know this from the excellent documentary "Spider-Man." This comes up in relation to the Court of International Trade decision in Trijicon, Inc. v. United States  in which the importer challenged the tariff classification of several versions of the gaseous tritium light sources ("GTLS"). The plaintiff uses them to make gun sights. The
Read more